Tesla to shut two US factories

Tesla will temporarily close its Fremont factory in California and Gigafactory New York from March 24 due to Covid-19 coronavirus concerns.

It initially planned to keep both factories operating, particularly as it had an exemption from the Alameda County in California.

Gigafactory Nevada will continue operations, as well as Tesla’s stores, service centres, and supercharger stations.

Tesla says it has followed all guidelines around operations at its facilities and honoured the federal government’s direction to continue.

“Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families, and our suppliers,” Tesla says.

“As such, we have decided to temporarily suspend production at our factory in Fremont, from end of day March 23, which will allow an orderly shutdown. Basic operations will continue in order to support our vehicle and energy service operations and charging infrastructure, as directed by the local, state, and federal authorities.

“Our factory in New York will temporarily suspend production as well, except for those parts and supplies necessary for service, infrastructure, and critical supply chains.”

Tesla says that is implementing ‘touchless deliveries’ in many areas so customers can continue to take delivery of their vehicle in a seamless and safe way.

“Due to the unique over-the-air connectivity of our vehicles, customers are able to unlock their new cars at a delivery parking lot via the Tesla App, sign any remaining relevant paperwork that has been placed in their car, and return that paperwork to an onsite drop-off location prior to leaving.”

Tesla adds that it’s in a healthy cash position to ride out the coronavirus pandemic.

It had US$6.3 billion at the end of the fourth quarter in 2019 before its recent US$2.3b capital raise.

“We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty,” the company says, explaining it also has credit worth about US$3b as well as Shanghai factory expansion financing.

Tesla had earlier reported it was continuing all operations although had taken precautions.